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A significant amount of forex traders have trouble drawing supply and demand zones manually. The problem with all these supply and demand indicators is they will mark the zones according to how the trader who coded the indicator trades supply and demand. This presents a problem because each trader has their own tweaks to the supply and demand method, some may draw the areas differently to how other traders draw them, which means if the person who has coded the indicator has a different criteria for identifying and drawing supply and demand zones which is incorrect to the way they should really be drawn, then by using the indicator your also going to be trading supply and demand in an incorrect way.
The chart above shows 6 supply and demand zones which were drawn automatically by a free supply and demand indicator I downloaded a few years ago. I just want to say right now this was actually one of the better supply and demand indicators which came out at the time supply and demand trading become popular, there were others which would literally only drawn like 3 levels on the charts. This tells me the person who created the supply and demand indicator above has coded the indicator based on the rules Sam Seiden uses in his supply and demand trading, Sam believes older zones have a higher probability of working out successfully than zones created recently, looking at the image above we can clearly see 5 out of the 6 zones marked by the indicator are all pretty old.
These zone are not good for trading as I mentioned in my supply and demand trading article, the older zones have a lower probability of working out successfully than newer zone which have formed recently.
The way I locate a supply or demand zone is by looking for a large bullish or bearish engulfing candle in the market, as this tells me someone has either brought or sold in an amount big enough to change the market direction. Maybe its a zone on a lower time-frame? If it is then why is it being marked on the 1 hour chart instead of the time-frames it actually appears on?
Like I said before this indicator is one of the better supply and demand indicators out there, even though it has some critical failings which is likely to cost you money if you start using it in your own trading.
One of the features of this indicator is when a zone you have drawn has been touched, the zone itself will change color to let you know the zone has been touched.
If a zone is touched it will change to a darker shade of the color which you can select in the settings tab for the indicator. Another small but important feature is the little number you can see in the corner of the supply and demand zones. First you need to click the link below and scroll down until you come across the link which says RectangleReader.
Get The Indicator Here. When the Data Folder window pops up, open the MLQ4 folder and past the rectangle reader file into the folder titled Indicators. Once this is completed restart MT4 and the indicator should show up in the custom indicators tab.
You can add any other custom indicator you come across to your charts by following the same steps outlined above. First navigate to the Charts tab at the top of the MT4 window and click on Indicators List, the box below should open up on your screen. When the new window opens scroll down until you come to the same options you can see in the image above. If the options you see are different to the ones you see in the above image change them to match mine and your zones will display in the same way you can see in the chart above.
The last thing I want to talk about when it comes to supply and demand zone indicators is how there are some websites which are selling these indicators for unbelievably silly prices. I have come across one website which sells a multitude of different indicators, one of which is a supply and demand zone indicator.
I understand the frustration traders have when they feel like they cannot do something correctly, such as draw accurate supply and demand zones. I can guarantee if you practice drawing the zones using the steps given in the article within time drawing the right zones will become second nature to you and you spend more time actually trading the zones instead of marking the zones.
Fantastic job on all of your blog entries. I have been reading through all of them since I came across them last night. Can become quite frustrating whilst learning it and the time spent on drawing these areas. It does take a lot of practice and a keen eye on seeing the untested areas before it happens. Anyways, I think this is a fantastic thing you are doing for people and if we pay attention it WILL shorten the learning curve for new traders especially.
Thanks for sharing this indicator. I did as instructed but the indicator is not showing on my MT4. Is the version still valid? My MT4 build is Ver 4. I know the indicator come from another site, but just asking if someone may have faced similar issue. Notify me of follow-up comments by email. Notify me of new posts by email. Thank you for your kind words Aces, hope you enjoy the site. I have the same problem as TL, any solution yet? Dude, sincerely thank you….
Hi, The indicator is not showing on my charts. Using MT4 Ver 4. This is a rectangle reader. Reply Cancel reply Notify me of follow-up comments by email. Lear to trade the same way the pros do! Yes, send it to me! No Thanks, I prefer to Lose Pips: Want Free Forex Trading Signals?
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